Washington ? A mortgage firm will set up a $40 million fund to compensate tens of thousands of customers and settle government allegations of abusive practices that caused homeowners to pay high insurance rates, improper late fees and other unnecessary costs.

Salt Lake City-based Fairbanks Capital Corp. had “engaged in a laundry list of predatory loan servicing practices,” according to a statement Wednesday by the Housing and Urban Development Department and the Federal Trade Commission.

At a news conference Wednesday, HUD called it a record civil settlement over violations of guidelines governing home loans and home-buying transactions. Government officials said the company also violated regulations covering fair credit reporting and debt collection.

Under a separate settlement, former Fairbanks chief executive officer Thomas Basmajian, who stepped down earlier this year, must pay $400,000 into the victim compensation fund that will be overseen by the FTC.